Let me introduce myself & my trading system (half of it, anyway)!

Beginner Questions
1

Hi, i believe i’ll be a very frequent user in these forums. I have been studying forex for almost 2 weeks now, and the more i learn the more i love it. I believe that i finally found what i want to do for life. I’m 20 y.o. and in college (which doesn’t demand much of me, though.)

I really don’t know where to begin. I thought about making a big and more detailed intro about myself but i figured no one’s interested in that so i’ll just go for the trading system and how i chose it!

As i already said, i’ve been studying for 2 weeks but i’ve learned A LOT (been studying it for over 9 hours a day), but i know that this is just a small little drop of knowledge compared to what’s needed to be a long-term profitable trader. Needless to say, by the amount of time i’ve been studying, i finished babypips school after 2 days i started studying it. It was a great intro into how to trade well and profitably in the long term. This website is SO great.

I learned about the indicators and practiced a bit with them in a Avafx’s trading platform (not the best, but i liked it because of it’s simplicity compared to other platforms i tried like FSol’s, FXCM’s, and some others -but once i go live i’ll change; i’ll want a more reliable broker, probably an ECN broker).

After reading ALL the 33 pages of the “Forextown” forum here (i’m that obsessed. i didn’t read all the pages inside of all the topics, though) and after having some practice with many indicators, i came to the conclusion that most of them are indeed not very useful. I read many topics with experienced users here (if not experienced, at least they have a lot of posts under their belts!) and many said that they ended up giving up indicators and traded almost exclusively using candlesticks and interpreting price action.

This made a lot of sense to me! Then there’s this topic that i read among the forum’s basements (301 Moved Permanently) that was very informative and one of the links there (from tymen1. THANKS!) led to a trading system that i believe is among the best (or at least it resonates very well with me).

Here’s the quote from the link:

[I]"
The Tools of the Trade
What can we use to tell where price is going next? The answer is: nothing. There is nothing in existence that can tell us where price is going next. But there are a few simple tools that can tell us where price is likely to go next - perhaps as often as 80% of the time.

These tools include:

  1. The trusty trendline
  2. The reliable pivot point
  3. The common candlestick"[/I]

Now i haven’t even started implementing the trading system yet but my demon account went from 96k (i lost 4k of the initial 100k playing around with indicators) and is now, after 2 days, already on 110k! The jump from 96k to 110k happened after i started seing the price trend and candlesticks (didn’t use pivot points yet) and forgetting about all those indicators.

I trade the EURUSD pair only for now, i have been observing it for only a few days and i think that i’m already starting to get a feel for it. Things in the last days have been awesome, if i shorted and prices went down, i got out right before prices went up. Same with going long. This happened countless times.

I know what you’re thinking, that i’m just a clueless excited newbie that got a lucky winning streak. It’s ok, even if you’re not thinking it, i am :p. I’m very very cautious, and i’m going to keep demo trading for a few months more to see what results i get, and to keep learning and practicing A LOT! I’ll keep you up on the results.

ps: i just saw this topic here (301 Moved Permanently) in the “newbie island” forum that looks very good. Apparently there’s a lot of good info here in this forum too.

I hope i didn’t put you to sleep, and this was just a very simplified intro; there’s so much more i wanted to say about what i learned but i’ll wait for some feedback first…

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Welcome. It looks like you are starting off on the right foot.:slight_smile:

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Welcome Equilibrum!

Although I am not very experienced myself (I learned the existence of the currency market exactly 2 months ago), I must agree with mytwopips. I also believe that the best way to trade is to read the price action.

However, I have found a few indicators that help me read it better. Bollinger bands make it easy to see incoming price breakout when they contract. It is also important to look at the volume indicators, which mesures the tension of the market.

Just my two cents. Have a good pippin’ and I’m glad you decided to be part of our community!

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Glad to be able to talk to you finally and thank you! I learned a lot from your posts around these forums. :slight_smile:

Thanks for the welcome!

Yes, i have played with BB and i found them useful for that (watching for breakouts). My system is not made yet, though… there’s still so much to learn! But i think i’ll use BBs in my system… let’s see.

As for volume indicators, can’t i measure volume by looking at the candlesticks only (like looking at their sizes)?

1 Like
5

That’s not the same thing… The volume is the quantity of money traded in the period of one candle, or maybe the quantity of trades made, I’m not quite sure… It is possible to have a very high volume on a very small candle, or even a doji. It just means the price was brought up and down to stay at breakeven.

I just started taking in consideration that indicator 2 days ago. Try it, I’m sure you’ll find interesting correlations if you observe hard enough.

Good luck!

P.S: I’m currently at college too, I’m 18 and I study sciences. It’s great, that is until the exams siphon all the time I could spend learning to trade :P.

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Interesting, i didn’t know it was possible to measure that in forex…

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Yea, it might be one of the only few indicators that are useful, in that it shows something that you couldnt see by only looking at the charts, unless you want to look at how many time a minute the price fickles and keep tracj of it for each candles :D.

8

I would like you take caution as you proceed. I did a demo for quite some time and was successfull at it. I also demoed FXDD’s auto trading platform by Tradency and that did even better. After several months of trading this I jumped into the fire with 5 grand. That money is now gone, and I was using the same system I used in demo. My manual trades broke just under even, the big losses came from the Autotrader.

I am now looking for a new broker and will trade manually from here on out. But even then I will excercise care, cause breaking under even is unacceptable in my eyes. Also you need to be watchfull of some brokers. I had box MT3 (for autotrading) and MT4(Manual) with FXDD, the MT3 was a pip higher on all currencies for some reason. I brought this to their attention and they simply said it should not be this way.

Now maybe I just hit a bad unlucky streak, who knows for sure. I do know that excited newcommers are snacks for the sharks. I am a very successful stock trader, but the sharks in the stock market, are minnows compared the the guys in forex.

In closing, learn as much as you can from the sharks, and as I always say, TRADE EMOTIONLESS, TRADE COLD.

Regards

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Yea, i’m aware that trading live is completely different from demo. When i start live, i’ll start with little (but enough not to get a margin call if i lose a few pips only). I’ll slowly increase the amount i trade live depending on my success. But that’s still far ahead, i got a lot of practicing until then! :smiley:

Thanks for the advices.

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Woa, after, yesterday, going from 110k to 105k in an unexpected (at least to me) correction in the trend of the EURUSD and GBPUSD pairs, i shorted after i believed the correction was over on both pairs, with 100k on GBPUSD and 1000k on EURUSD (would never do this with a live account if i had 100k in it…), i’m now up to 125k on my account. Not bad, not bad :smiley:

Trend following really is the way to go, together with a few ways to spot corrections in their beginning and to spot when they’re losing stem. I’ve been doing this mostly on gut feel until now but i’ll certainly develop a system to spot these opportunities.

12

your well on your way by bypassing indicators and getting to what the pros use… s/r, trendlines, pivots, and candlesticks.

Good for you! I wish you the best of luck!

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After several frustrating attempts to create a trading system using indicators, I’m now in your camp trading by just observing the price movements thru the candlesticks. I believe the the most important thing in a system is money management. I just would like to ask if you use stop-loss? and/or target profit? and what time frame do you use?

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I’m still testing with various configurations, i’ll let you know when i find one that i think is best for me.

But i agree completely. Money management is by far the most important thing in a system.

Although i don’t have anything concrete yet, it’ll look something like this:

1- Never risk more than 1% of total equity in any single position (maybe i’ll raise it to 2% later, once i get more experienced and confident in my abilities to make long-term profit). My stop loss positions will be defined by this rule.

2- As for target profit, i’m still not sure. It’ll depend on the current trading situtation, and not in some daily profit target that could be set (which is a bad thing to do because it puts pressure on the person).

3- As for time frames, i use weekly and daily to see what’s the major trend (like, in the EURUSD, the major trend is a bearish one). Then i’ll never place a trade against the major trend. I’ll then use smaller time frames (which i haven’t determined yet) to see price corrections, and place a short entry, in the EURUSD case, after i think that the correction is about to end.

It still needs a lot of work, but this is the sketch of my future plan. Of course i may change it if i find/learn something new…

I could just get a plan that’s already laid out and worked upon by someone else, but i think that i really need to build my own plan, otherwise i won’t have enough understanding of it and confidence that it is a good plan. This in turn would cause me to be doubtful and raise all kinds of emotions when trading with real money and i’m sure i would end up screwing up…

I believe it’s really essential that we know all the basics (all the WHYs) and everything about the plans with which we’re trading.

15

That on the demo a/c , the broker provided with you with high leverage and you can make profit easier. When come to live a/c , If you have that much capaital 100 k , then should be great to trade forex and making money easier. Let say if you don’t have a large amout to invest then if you use high leverage and when trade goes agaist you , then you lost all your money . If i .m not mistake , you use high leverage eon your demo trade. When you want to go for live trading , and you only have few thousand dollars saving . I adv you to try for other broker with smaller leverage like what Oanda offer 1:20 leverage . Practice with thsi demo a/c first with the smaller lot size. This adv for those have smaller capital to go for live trading.

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I know that. I said in one of my posts here in the topic that i would never use a large leverage when trading with real money.

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Hey - Congrats on your intial success! I am a newbie as well and was interested in reading your story.Can you tell me what else you have done to educate yourself?

I am trying to learn as much as possible as well. Thanks for your help.